Bottoms up for Fuller's as half-year profits jump

The brewer of London Pride has seen an 11% rise in half-year profits. But next year could still prove tough.

by Emma Haslett
Last Updated: 06 Nov 2012
Most of the UK’s beer trade may be in urgent need of the rejuvenating properties of the hair of the dog, but London-based brewer Fuller, Smith & Turner appears to be an exception to the general gloom. The company said today it’s seen an 11% rise in half-yearly profits, from £14.1m last year to £15.7m, with revenues up 4% to £121.5m. The brewer said in the long term, it expects things to pick up even more – but warned that the whole industry could end up drowning its sorrows over the next few months as VAT goes up and those spending cuts start to bite. Cheers for that.

The company, best known for London Pride ale, raised a particular toast to its hotel business, which saw a 1% revenue boost to £13.5m, up from £13.3m last year, while drinks sales grew by 2.3% - helped, it said, by people celebrating the warm early summer weather with a pint. And it says that, thanks to its base in the capital, it’s expecting some good times ahead with ‘plenty of attractions bringing customers’. Attractions which include the Olympics – and, of course, the imminent royal wedding. Hmm. Wonder if Her Maj is an ale fan?

However, it also warned that there could be trouble ahead. The VAT rise in January is, according to a report by the British Beer and Pub Association in May, set to cost drinkers an extra £300m a year, while those spending cuts mean that ‘the economic climate is likely to remain challenging for some considerable time’, it said. And, as one of the few brewers left that also operates its own pub chain, it could be argued that Fuller’s may bear the brunt of that harder than most.

Still, it’s at least encouraging to the beleaguered beer industry, which has been nursing the mother of all hangovers in recent months. Another report by the BBPA last month showed that beer sales dropped by 9.7% in the third quarter of the year, the biggest quarterly decline since 1997. The organisation placed the blame squarely on England’s dismal performance at the World Cup. But people heading to Tesco for a cheap’n’cheerful eight-pack instead of propping up the bar at their local boozer probably has something to do with it, too.

While we’re waiting for that much-needed boost from Kate’n’Will's impending nuptials, most boozers and their suppliers may find the next few months a struggle. Better order another – and this time, make it a double.

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